Employees can have many reasons for leaving a company. Whether it’s a negative work environment, poor job satisfaction or a better opportunity elsewhere, leaving a job has never been as easy as it is now.
But while some companies might consider their workers replaceable, other businesses cannot afford a high turnover. This is especially true during massive transitions like a business succession.
To minimize the turnover, businesses must understand why employees leave—and what can make them stay.
What makes employees quit during succession?
Business succession is a major transition for everyone involved—not just the owners, but the employees as well. Because of this change, some employees might have several concerns that motivate them to leave, such as:
- Worries about job security
- Unclear company direction under new leadership
- Fear about workplace culture shifts
- Loss of personal connections
- Concerns about career advancement
Clear communication can help address these concerns. However, it may not be enough to reassure employees of their future with the company.
What can businesses do to make employees stay?
In the 1970s, Harvard Business Review published an in-depth analysis of why employees stay. Researchers likened their findings to the concept of “inertia.” Employees stay with their employers until something causes them to leave.
They focus on two factors that affect this inertia: Job satisfaction and work environment. To increase inertia, businesses should keep their employees satisfied with their jobs and compatible with their environment.
But how can businesses do this during succession?
How can you increase employee retention during succession?
There are many ways to maximize retention, but there are three that are most relevant during this transition.
- Provide reassurance: New and old owners alike should communicate with employees to address concerns about job security, new leadership and other fears. Involving employees in the transition process can also provide reassurance.
- Back up assurances with actions: Words may not be enough to convince employees to stay. Owners can consider incentives for staying or implementing contract clauses to address role changes, reporting structures and job security.
- Minimize workplace changes: Employees tend to dislike change unless it is for the better. For example, new owners can maintain existing workflows unless changing them will benefit everyone.
An experienced attorney can help employ these strategies while drafting a succession plan. Aside from handling contracts and choosing successors, legal guidance can help companies protect their most valuable asset—the people who run the business.
